November 2, Via Electronic Filing

Transcription

1 414 icollet Mall Minneapolis, M ovember 2, 2015 Mr. Daniel P. Wolf Executive Secretary Minnesota Public Utilities Commission th Place East, Suite 350 St. Paul, M Via Electronic Filing Re: APPLICATIO AUTHORITY TO ICREASE ELECTRIC RATES ORTHER STATES POWER COMPAY DOCKET O. E002/GR Dear Mr. Wolf: Enclosed is the Application for a Proposed Increase in Electric Rates (Application) of orthern States Power Company, doing business as Xcel Energy. This Application is being filed with the Minnesota Public Utilities Commission (Commission) pursuant to Minn. Stat. 216B.16, subds. 1 and 19. Xcel Energy seeks authority to increase electric rates, through a three-year multiyear rate plan (MYRP Plan), to reflect the current cost of providing service to our customers, including an appropriate return on common equity. We believe our MYRP Plan can provide benefits to our customers and stakeholders by affording us the opportunity to work with our partners regulators, stakeholders, and customers to accomplish significant State policy-related goals that benefit our customers over the long-run while maintaining Minnesota s leadership in progressive energy policy. By continuing our investment in our distribution and transmission systems we will promote continued reliability, which is important to many of our customers. By making investments in our nuclear plants and renewable resources, we continue to deliver carbon-free generation while reducing carbon emissions, consistent with the expectations of our customers and policy makers. We are able to make these investments and also provide customers with price predictability with our MYRP Plan.

2 Mr. Wolf ovember 2, 2015 Page 2 of 5 While multiple factors drive our overall request, our capital investments in transmission, distribution and generation is by far the largest component. We are continuing to invest in our system to maintain the health of our assets and to preserve our ability to provide safe, reliable and clean energy to our customers. In addition, our rate request reflects certain carry-forward items related to our last electric case, including the rate moderation tools used to moderate rates in 2014 and The combination of these factors, as well as the need to address increases in our normal business costs, leads us to file this case. With our MYRP Plan, we are requesting a three year increase of $ million, or 6.4 percent, in 2016, an incremental $52.1 million, or 1.7 percent, in 2017, and an incremental $50.4 million, or 1.7 percent, in 2018 for a total increase of $297.1 million, or 9.8 percent based on 2016 present revenues. The MYRP Plan reflects a first year revenue requirement calculated based on a traditional test year (2016), and with revenue requirements for the proposed plans years (2017 and 2018) also reflecting a cost of service approach, as described in our Application. Today, we are requesting the Commission to suspend our rates, and authorize the recovery of interim rates effective January 1, 2016, as set forth in our otice and Petition for Interim Rates (Petition). Our request is for a 2016 interim rate equal to $163.7 million, or 5.5 percent, based on interim present revenues. We also request a 2017 interim rate equal to $ million, or 7.0 percent, based on present revenues. The interim revenue request for 2016 will be uniformly billed as a 7.75 percent increase on the base rate portion of customers bills (exclusive of fuel and purchased energy costs and certain rate riders) and for 2017 will be uniformly billed as a 9.88 percent increase on the base rate portion of customers bills (exclusive of fuel and purchased energy costs and certain rate riders). The difference in the percentage increase results primarily from the unbundling of fuel and purchased energy costs approved by the Commission in our 2005 electric rate case (Docket o. E002/GR ). Since we believe multi-year rate compacts can provide benefits to our customers, policy makers and stakeholders, we are also offering a stand-alone, separate five year option for consideration. Our five-year option offers discounted rates, both in 2016 and in the later years of the plan, and more time for parties to work on important policy matters with the Company. We believe the benefits of this option merit serious consideration and ask the Commission to encourage parties to negotiate this option in good faith.

3 Mr. Wolf ovember 2, 2015 Page 3 of 5 We recognize that we are the first utility in the State of Minnesota to propose a three year or longer MYRP and the first utility to propose a plan under the revised MYRP statute. The goal of either our MYRP Plan or the five year option is to provide just and reasonable rates for our customers. We look forward to dialogue with our stakeholders and the Commission as we explore using the new MYRP law to set rates for multiple years, while finding administrative efficiencies and additional customer and other stakeholder benefits. We also propose some changes to the terms and conditions of our Electric Rate Book, Volume 2F, under which we provide service to our customers. Our rate design proposals include a first of its kind bill payment assistance program for lower income seniors and those with a certified medical condition. We believe this offering can provide significant assistance to persons currently unserved by State or federal programs. Typically final rates would become effective within 10 months of the date of the Application, unless the review period is extended by the Commission. We recognize, however, that the statutory triggers for extension provided by Minn. Stat. 216B.16 subds. 2 and 19 will apply to the schedule of our case. A. Contents of Filing Our Application for Proposed Increase in Electric Rates is presented in the following volumes: Volume 1 (Application/Interim) Volumes 2A to 2F Volume 3 Volume 4A and 4B Volume 5 Volumes 6A and 6B Petition, otice of Change in Rates, Interim Rate Petition Testimony and Schedules, Compliance Matrix, Tariff Sheets Required Information Test Year Workpapers Budget Summary and Correspondence Budget Documentation Volume content detail is provided as an attachment to this Application. In addition to the documents listed above, included in Volume 1 is a proposed otice to be provided to each municipality and county in Xcel Energy s electric service territory

4 Mr. Wolf ovember 2, 2015 Page 4 of 5 named on the attached mailing list. Also included in Volume 1 is the otice and Petition for Interim Rates (Interim Rate Petition) that describes the interim rate schedules for each customer class and contains proposed customer notices, if the Commission elects to suspend the requested final rate increase. Once the notices are approved and the interim rate increase determined by the Commission, these notices will be provided to the municipalities, counties and customers. Pursuant to Minn. R , subpt. 2, Xcel Energy is also submitting a separate miscellaneous rate change filing in Docket o. E002/M seeking to restate the Base Energy Adjustment Charge for interim rates. B. Request for Protection of on-public Information The Company recognizes and supports the need for transparency in review of our Application. on-public data included in this filing is limited to certain portions of the Testimony, schedules and workpapers. Consistent with our last electric rate case (Docket o. E002/G ), there is an increased level of detail compared to prior initial filings and thus there is more on-public data provided with this filing. Attachment A to the otice of Change in Rates identifies the specific models, reports, expenses, and sales and pricing data identified as on-public data in the filing that we believe qualify as trade secret data pursuant to Minn. Stat , subd. 1(b). These models, reports, and expense, sales and pricing data have important economic value to the Company as a result of their not being public, and the Company takes efforts to prevent their public disclosure. The Company has identified the Trade Secret and other on-public information pursuant to Minn. Rule C. Service and Summary of Filing A copy of the Application has been served on the Minnesota Department of Commerce, Division of Energy Resources, and the Office of Attorney General - Antitrust and Utilities Division. The Summary of Filing is being served on all intervenors to the Company s most recent electric rate case (Docket o. E002/GR ) and all persons on the Company s electric general service list, as shown on the attached Certificate of Service. Xcel Energy will fully cooperate with the Commission, the state agencies and stakeholders as they review the Application, including the Interim Rate Petition.

5

6 OTICE OF CHAGE I RATES ITERIM RATE PETITIO Volume 1 1. Filing Letter 2. otice of Change in Rates 3. otice and Petition for Interim Rates 4. Agreement and Undertaking 5. RDM Deferral 6. Interim Rate Supporting Schedules and Workpapers 7. Interim Tariff Sheets a Interim Tariff Sheets - Redlined b Interim Tariff Sheets - Clean c Interim Tariff Sheets - Redlined d Interim Tariff Sheets - Clean

7 TESTIMOY AD SUPPORTIG SCHEDULES Volume 2A 1. Policy and Multi-Year Rate Plan 2. Multi-Year Rate Plan 3. Multi-Year Rate Plan O&M Escalation Indices 4. Revenue Requirements 5. Budgeting TESTIMOY AD SUPPORTIG SCHEDULES Volume 2B 1. Capital Structure 2. ROE 3. Cost Allocations 4. Sales Forecast TESTIMOY AD SUPPORTIG SCHEDULES Volume 2C 1. uclear Operations 2. Transmission 3. Energy Supply 4. Distribution 5. Business Systems

8 1. Insurance TESTIMOY AD SUPPORTIG SCHEDULES Volume 2D 2. Property Tax 3. Customer Care / Bad Debt 4. Employee Expenses 5. Comp and Benefits 6. Pension TESTIMOY AD SUPPORTIG SCHEDULES Volume 2E 1. Pension Investment (Tyson) 2. Pension Investment (Inglis) 3. Depreciation 4. Decoupling 5. CCOSS 6. Rate Design

9 Proposed Redlined Proposed Clean Proposed Redlined Proposed Clean Proposed Redlined Proposed Clean PROPOSED TARIFF SHEETS Volume 2F

10 REQUIRED IFORMATIO Volume 3 I. Index II. Required Financial Information 1. Definitions 2. Jurisdictional Financial Summary Schedules (Rule ) Plan Year Plan Year Proposed Test Year 2016 Projected Fiscal Year 2015 Most Recent Fiscal Year Rate Base Schedules (Rule ) A. Rate Base Summary B. Detailed Rate Base Components C. Rate Base Adjustments D. Rate Base Assumptions and Approaches E. Rate Base Jurisdictional Allocation Factors 4. Operating Income Schedules (Rule ) A. Jurisdictional Statement of Operating Income B. Total Utility and Jurisdictional Operating Income statements C. Income Tax Computation D. Operating Income Statement Adjustments E. Operating Income Assumptions and Approaches F. Operating Income Jurisdictional Allocation Factors 5. Rate of Return Cost of Capital Schedules (Rule ) A. Rate of Return Summary Schedules B. Supporting Schedules C. Average Short Term Securities D. Average Common Equity Balances

11 REQUIRED IFORMATIO Volume 3 (continued) 6. Rate Structure and Design Information (Rule ) A. 2016, 2017 and 2018 Operating Revenue Summary Comparison B. 2016, 2017 and 2018 Operating Revenue Detailed Comparison C. Test Year 2016, 2017 and 2018 Class Cost of Service Study 7. Other Supplemental Information A. Annual Report B. Gross Revenue Conversion Factor 8. Five Year Forecast III. Commission Policy Information 1. Advertising 2. Charitable Contributions 3. Organization Dues 4. Research Expenses IV. Other Required Information 1. FERC Sub Account Information 2. Minn. Stat. 216B.16 subd. 17: Travel, Entertainment & Related Employee Expenses 3. Regulatory Assets, Liabilities, Deferred Debits and Credits 4. CO Comparison (Docket o. E002/GR IR DOC-160) 5. GAAP/FERC/COSS Comparison (Docket o. E002/GR IR DOC- 128)

12 TEST YEAR WORKPAPERS Volume 4A I. IDEX II. COST OF SERVICE STUDY (COSS) III. RATE BASE (PLAT) P1. Summary P2. on-plant P2-1 Assets & Liabilities P2-2 Deferred P2-3 Back-up P3. Roll Forward Reports P4. Plant Manual Sources P4-1 uclear Outage Amortization P4-2 on-qualified Tax Items P4-3 ew Business CIAC P4-4 ITC Grant Accounting P4-5 DOE Payment P5. M&S, Prepayments & Fuel Inventory P5-1 Prepayments P5-2 Material & Supplies P5-3 Fuel Inventory P6. Property Tax P7. Tax Additions P8. Tax Credits P9. Other Rate Base P9-1 Interest on Customer Deposits P9-2 Customer Advances P9-3 Miscellaneous Debits & Credits P10. Cash Working Capital IV. REVEUE R1. Revenue Summary R2. Work papers R2-1 Present Revenues R2-2 Transmission R2-3 Interchange R2-4 Other Revenue R2-5 Back-up

13 V. O&M O1. Summary O2. Manual Items O2-1 Cost of Goods O2-2 Transmission O2-3 Interchange O2-4 Windsource O3. Amortizations O4. Taxes Other than Income O5. State and Federal Income Tax VI. COST OF CAPITAL C1. Schedules VII. BUDGET ALLOCATORS B1. Customers B2. Energy (Sales) & Demand B3. Labor B4. Other TEST YEAR WORKPAPERS Volume 4A (continued)

14 VIII. ADJUSTMETS A1. Black Dog Screenhouse A2. Advertising A3. Customer Deposits Expense A4. Dues: Chamber of Commerce A5. Dues: Professional Associations A6. Economic Development Admin A7. Economic Development Donations A8. Foundation Admin A9. Foundation and Other Donations A10. Incentive Compensation A11. Investor Relations A12. Monticello LCM/EPU Return A13. obles Amounts over CO A14. Pension: on Qualified A15. Aviation A16. Bad Debt Expense A17. CIP Approved Program Levels A18. CIP Incentive A19. Employee Expenses A20. Like Kind Exchange Program A21. uclear Retention A22. Other Revenue 3 Year Average A23. Retiree Medical: Discount Rate A24. Pension Smoothing A25. Remaining Life Study: SPM A26. Remaining Life Study: SPW A27. Trading: Asset-Based Margin A28. Trading: on Asset-Based Admin A29. Trading: on Asset-Based Margin A30. XES Allocation on Labor Hours A31. PI EPU Recovery A32. Rate Case Expenses A33. Sherco 3 Depr Deferral A34. Transco Costs A35. Rider: RES A36. Rider: TCR A37. Windsource A38. ADIT Prorate for IRS A39. Cash Working Capital Adjustment A40. Change in Cost of Capital A41. et Operating Loss TEST YEAR WORKPAPERS Volume 4B

15 IX. MYRP Support M1. Capital Forecast M2. Other Rate Base M3. Forecast Expenses M4. Forecast Revenues M5. Escalated O&M M6. on Retail Revenue M7. Interchange M8. et Operating Loss M9. Change in Cost of Capital X. Rebuttal Adjustments R-1. Remaining Lives R-2. Hollydale Transmission R-3. Prairie Island Indian Community R-4. Economic development Administration R-5. CIP Approved Costs R-6. Bonus Tax Depreciation XI. ITERIM Interim Adj 1 Monticello Dry Cask to CWIP Interim Adj 2 M Remaining Life Study Removal Interim Adj 3 TCR Roll-In Removal Interim Adj 4 Incremental PI Payments Removal Interim Adj 5 Remove 2017 Escalation

16 BUDGET SUMMARY AD CORRESPODECE Volume 5 1. Executive Summary 2. Summary Reports 3. Budget Process 4. Instructional Correspondence

17 BUDGET DOCUMETATIO Volume 6A - arrative Documentation A. Energy Supply B. uclear Generation and Outage Deferral & Amortization C. Transmission D. Distribution Operations E. Gas Systems F. Operation Services G. Benefits H. Utilities & Corporate Services Business Systems VP Human Resources & Employee Services Human Resources Workforce Relations and Safety Aviation and Travel Services Security Services Property Services Chief Administrative Office SPM President Marketing I. Shared Service Organizations Chief Executive Officer Corporate Secretary and Executive Services Corporate Other Financial Operations General Counsel

18 BUDGET DOCUMETATIO Volume 6B Variance Explanations Supporting Schedules A. Schedule 1 Analysis of Billings B. Schedule 2 Service Company Billings C. Schedule 3 O&M by Object Account Total Company All Utilities Total Company All Utilities (By Business Area) Total Company By Utility Schedule 3A Total Company By Utility 3A (By Business Area) D. Schedule 4 O&M by FERC Account Total Company All Utilities Total Company All Utilities (By Business Area) Total Company By Utility Schedule 4A Total Company By Utility 4A (By Business Area) E. Schedule 5 Capital Expenditure by Business Area Energy Supply uclear Generation Transmission and Operating Services Distribution Operations Gas Systems Corporate Supplemental Reports A Financial Performance Team (FPT) O&M Reports SPM Company yearend O&M Expense Actual vs Budget Variance Explanations B SPM Company Electric Utility O&M Expenses Annual Actual vs Budget Expenses by Functional Class and FERC Account C Financial Performance Team (FPT) Capital Expenditure Reports SPM Company yearend Capital Expense Actual vs Budget Variance Explanations

19 otice of Change in Rates

20 STATE OF MIESOTA BEFORE THE MIESOTA PUBLIC UTILITIES COMMISSIO Beverly Jones Heydinger ancy Lange Dan Lipschultz John Tuma Betsy Wergin Chair Commissioner Commissioner Commissioner Commissioner I THE MATTER OF THE APPLICATIO OF ORTHER STATES POWER COMPAY FOR AUTHORITY TO ICREASE RATES FOR ELECTRIC SERVICE I THE STATE OF MIESOTA DOCKET O. E002/GR OTICE OF CHAGE I RATES A. Introduction orthern States Power Company, doing business as Xcel Energy, seeks authority from the Minnesota Public Utilities Commission to increase retail electric rates in Minnesota pursuant to Minn. Stat. 216B.16 and Minn. R. Parts and (Application). The Company also seeks authority to change some terms and conditions of electric service. The Company requests a three year multi-year rate plan (MYRP), implemented pursuant to Minn. Stat. 216B.16, subds. 1 and 19. Our three year plan is built upon a 2016 test year and then offers stable, predictable, and affordable rates for our customers while enabling the Company to continue making critical investments in our system and affording all stakeholders the ability to work together to accomplish important policy objectives during this period of rate stability. The Company has also brought forward a separate five year MYRP option, again implemented pursuant to Minn. Stat. 216B.16, subds. 1 and 19. We believe this option provides a simple, straightforward path to even greater benefits for our customers and other stakeholders. The Company s revenue deficiency in 2016 reflects the costs of significant investments in our system, both in 2015 and over the next several years, as we continue to invest in carbon free energy sources and replace critical infrastructure while preparing for the future. These investments are resulting cleaner air, a better environment and a more resilient, flexible and reliable energy system that can deliver

21 value to our customers for decades to come, but they require sufficient revenues to support them. In addition, a sizable portion of our 2016 revenue deficiency results from the rate moderation tools utilized in our most recent rate case. As was discussed in that case, those tools provided for lower short term rates, but contribute to the need for rate relief in this case. This Application includes the following information in accordance with Minnesota Statutes and the Commission s rules: B. otice and Proposal Regarding General Rate Change. (Minn. R (A)(1) and ) 1. ame, address, and telephone number of utility. orthern States Power Company 414 icollet Mall Minneapolis, M (612) ame, address, and telephone number of attorneys for the utility. Amanda Rome Lead, Assistant General Counsel Xcel Energy Services Inc. 414 icollet Mall Minneapolis, M (612) Eric F. Swanson Winthrop & Weinstine, P.A. Suite South Sixth Street Minneapolis, M (612) Date of filing and date modified rates are to be effective. The date of this filing is ovember 2, Pursuant to 216B.16, subd. 1, Xcel Energy requests a final increase in electric revenues of $194.6 million, or 6.4 percent, effective January1, 2016, sixty (60) days after filing, without suspension, $246.7 million, or 8.1 percent, effective January 1, 2017, without suspension, and 2

22 $297.1 million, or 9.8 percent, effective January1, 2018, based on 2016 present revenues. If the Commission elects to suspend the proposed rate increase under Minn. Stat. 216B.16, subd. 2, the Company requests, pursuant to Minn. Stat. 216B.16, subds. 3 and 19, that an interim rate increase of $ million, or an approximate 5.5 percent overall bill increase, be effective on January 1, 2016, as discussed in the Company s otice and Petition for Interim Rates (Petition), included in this Application. The interim revenue request will be uniformly billed as a 7.75 percent increase on the base rate portion of customers bills (exclusive of fuel and purchased energy costs and certain rate riders). The difference in the percentage increase results primarily from the unbundling of fuel and purchased energy costs approved by the Commission in our 2005 electric rate case (Docket o. E002/GR ). As discussed in the Petition, the Company also requests, pursuant to Minn. Stat. 216B.16, subds. 3 and 19, that an incremental interim rate increase of $44.9 million, or an approximate 1.5 percent incremental bill increase, be effective on January 1, The 2017 interim revenue request will also be uniformly billed as a 9.88 percent increase on the base rate portion of customers bills (exclusive of fuel and purchased energy costs and certain rate riders). Typically final rates would become effective within 10 months of the date of the Application, unless the review period is extended by the Commission. We recognize, however, that the statutory triggers for extension provided by Minn. Stat. 216B.16 subds. 2 and 19 will apply to the schedule of this case. 4. Description and purpose of the change in rates requested. The Application for a change in rates applies to all of Xcel Energy s retail electric customers in the State of Minnesota, and the proposed rates are designed to produce revenues sufficient to meet the Company s cost of service for the test year ending December 31, The Company also requests to increase rates an additional 1.7 percent effective January 1, 2017, and 1.7 percent, based on 2016 present revenues, effective January 1, Effect of the change in rates. The effect of the proposed electric rate increase, exclusive of revenues related to franchise fees, gross earnings taxes, and certain riders will be an increase in gross 3

23 revenues for the 2016 test year of $194.6 million, or an approximate increase of about 6.4 percent above the present test year gross revenues, an additional $52.1 million or 1.7 percent, based on 2016 present revenues, effective January 1, 2017 and an additional $50.4 million or 1.7 percent, based on 2016 present revenues, effective January 1, For the three years, the Company requests an increase of present revenues of $297.1 million, or 9.8 percent. Our request is based on our proposed three year MYRP, consisting of a 2016 test year and 2017 and 2018 plan years. We appreciate that our request represents the first time a utility is proposing a three year MYRP and the first time a utility has proposed a MYRP under the newly amended Minn. Stat. 216B.16, subd. 19 (the MYRP Statute ). We have worked to fairly reflect the impact of our requested relief on base rates in a clear manner when developing the proposed notices of our Application. We also represented the impact of our requested relief on base rates consistent with the manner in which we did for our 2013 electric rate case request, which also included a multi-year rate increase request. At the time the Company implements Final Rates, we propose that two projects in the Transmission Cost Recovery Rider ( TCR Rider ) be included in base rates. This proposed transfer of these amounts, related to the Brookings and Fargo CapX2020 projects, does not change the Company s overall revenue increase request. Assuming the Company s request is approved, we will reset the TCR Rider, by removing the Brookings and Fargo projects, simultaneously with the implementation of final rates. As such, this transfer will not result in an increase or decrease in to customers total bills. We propose some changes to the terms and conditions of our Electric Rate Book, Volume 2F, under which we provide service to our customers. 1 As was done in our last three electric rate cases, we propose to apply the interim surcharges to base rates, and the amount included in our base rates does not include fuel costs. For clarity, we have provided 2016 and 2017 interim tariffs, Section 5, 11th Revised Sheet o. 94, which lists the rate elements to which the Interim Rate Surcharges would apply and those rate riders to which the Interim Rate Surcharges would not apply. The Proposed Final Rates were calculated using the Company s 2016 proposed test year deficiency, the 2017 and 2018 plan year deficiencies, and our proposed final rate design. 1 See Volume 2E, Direct Testimonies of Michael A. Peppin and Steven V. Huso. 4

24 We believe the approach described above fairly represents the proposed rates and bill increases for customers. To the extent the Commission wishes to make alternative assumptions regarding the treatment of rate riders, we would adjust our proposed notices accordingly. 6. Signature and title of utility officer authorizing the proposal. The Application is signed on behalf of Xcel Energy by Christopher B. Clark, President of orthern States Power Company, a Minnesota Corporation. C. Modified rates. (Minn. R (A)(2) and ) Attached to this Application are rate schedules containing the proposed final rates and tariffs. These proposed final schedules and tariffs are supported by the prefiled Direct Testimony of Mr. Steven V. Huso, in Volume 2E. Redlined and on- Redlined versions of the tariffs accompany this Application also in Volume 2F. D. Expert opinions and supporting documents. (Minn. R (A)(3) and ) Attached to this Application are statements of fact, expert opinions, substantiating documents and exhibits supporting the change in retail electric rates. Pursuant to Minn. R , Aakash H. Chandarana provides Direct Testimony as the Company s designated official in support of the Application. A list of the Company s other witnesses is provided in Mr. Chandarana s Direct Testimony. E. Information requirements. (Minn. R (A)(4) and ) Attached to this Application are: Volumes 2A to 2F, the Direct Testimonies and Schedules of the Company s witnesses; (including Redlined and on-redlined version of the tariffs); Volume 3, Required Information; Volumes 4A and 4B, Test Year Workpapers; Volume 5, Budget Summary and Correspondence; and Volumes 6A and 6B, Budget Documentation. Together, these volumes represent the Company s supporting documentation and contain the information in support of a general rate increase required by Minn. R through Minn. R The data for the most recent fiscal year is The projected fiscal year is The proposed test year is the calendar year ending December 31, 2016 (Test Year), 5

25 and the Application also addresses proposed rates for the years ending December 31, 2017 and 2018 ( Plan Years ). We have provided the information required by Minn. Stat. 216B.16, subd. 17 in Volume 3 of our Application. Certain summary information is included within Volume 3 with detailed information provided in electronic form on compact disk. F. Methods and procedures for refunding. (Minn. R (A)(5) and ) Included with this Application is an Agreement and Undertaking signed and verified by Christopher B. Clark, President orthern States Power Company, a Minnesota corporation. G. otice to municipalities and counties. (Minn. Stat. 216B.16, subd. 1) Pursuant to Minn. Stat. 216B.16, subd. 1, Xcel Energy proposes to mail the enclosed otice to all municipalities and counties in our Minnesota electric service territory. This notice includes a discussion of the proposed interim rates, as well as information regarding the general electric rate case filing. The representation of present, interim, and proposed rates on this otice reflects the approach described in our response to Part B. 5, above. The Company requests Commission approval of the otice, so that it may be mailed in a timely fashion. H. Customer notice. (Minn. R , subpt. 3) We will notify customers, through a bill onsert or insert, of our Application to increase retail electric rates. If the Company s retail electric rate increase is suspended, the same bill notice will also explain the impact of Xcel Energy s interim rates on customer bills. Included in this Application is an example of our proposed notice of this rate increase, assuming that the rate increase has been suspended. Similar to the notice approved by the Commission in our 2014 test year electric rate case (Docket o. E002/GR ), the notice is organized in a question-and-answer format and includes an explanation of the interim rates and the general rate increase proposals. The Company requests approval of the customer notice so it can be included prior to or with the first bills issued with interim rates. Finally, the Company will make this Application, Testimony, and Supporting Documentation easily available to 6

26 customers by posting it on the Xcel Energy website xcelenergy.com/rates (make sure Minnesota is selected in top right-hand corner), select Rates then select 2016 Minnesota Electric Rate Case. I. Filings requiring determination of gross revenue requirement. (Minn. R ) Pursuant to Minn. R , we is submit the following information in addition to that required by Minn. R Summary. A summary of the Application is attached to this notice. 2. Service; proof of service. The Company will serve copies of the Application on the Department of Commerce, Division of Energy Resources and the Office of the Attorney General Antitrust and Utilities Division. We will serve a copy of the Summary on the other parties on the general service list for Xcel Energy electric filings, and on the service list in the Company s last retail electric rate case proceeding, Docket o. E002/GR The service lists for these proceedings and a certificate of service are attached. 3. otice to public and governing bodies. See Section G. and H., above. In addition, Xcel Energy will publish a notice of the proposed change in newspapers of general circulation in all county seats in the Company s Minnesota electric service territory. We propose using the content from the otice to Counties and Municipalities located in Volume 1 for the content of the published notice. 4. otice of hearing. We will notify ratepayers of hearings held in connection with this Application as directed by the Commission. Xcel Energy will also publish notice of the hearings in newspapers of general circulation in all county seats in the Company s Minnesota electric service area, as directed by the Commission. 7

27 J. Request for Protection of on-public Information The Company recognizes and supports the need for transparency in the review of our Application. on-public data included in this filing is limited to certain portions of the Testimony, schedules and workpapers. There is somewhat more on-public data provided with this filing, given the greater level of detail accompanying our initial filing and the greater time period involved. Much of this information was provided through Trade Secret data request responses in our prior cases. Attachment A to the otice of Changes in Rates identifies the specific models, reports, expenses, and sales and pricing data identified as on-public data in the filing that we believe qualify as trade secret data pursuant to Minn. Stat , subd. 1(b). These models, reports, and expense, sales and pricing data have important economic value to the Company as a result of their not being public, and the Company takes efforts to prevent their public disclosure. The Company has identified the Trade Secret and other on-public information pursuant to Minn. Rule The Company is electronically submitting complete Public and on-public versions of those portions of our filing that contain Trade Secret or other on-public information. K. Service list. Pursuant to Minn. R , the Company requests the following persons be placed on the Commission s official service list for this proceeding: Amanda Rome Xcel Energy Services Inc. 414 icollet Mall, 5 th Floor Minneapolis, M SaGonna Thompson Xcel Energy 414 icollet Mall, 7 th Floor Minneapolis, M Eric Swanson Winthrop & Weinstine, P.A. Suite South Sixth Street Minneapolis, M

28

29 orthern States Power Company Docket o. E002/GR Attachment A Page 1 of 8 O-PUBLIC ITEMS IDEX Item / Location Projected Costs, Vendor Proprietary Information, and/or Contractually egotiated Details Mills Schedule 5 Chemical Costs Mills Schedule 12 Plant Outages Changes in Energy costs Harkness Schedules 4, 5 and 6 Internal Assessment Summaries Harkness Schedules 13 and 14 Cost Comparisons and Benchmarking Justification Data regarding chemical costs has been marked trade secret as defined by Minn. Stat (1)(b). The information derives an independent economic value from not being generally known or readily ascertainable by others who could obtain a financial advantage from their use. Data regarding changes in energy costs for plant outages has been marked trade secret as defined by Minn. Stat (1)(b). The information derives an independent economic value from not being generally known or readily ascertainable by others who could obtain a financial advantage from their use. Xcel Energy designated Schedules 4, 5 and 6 as Trade Secret in their entirety because these schedules contain information about the analysis and information that was prepared by the Company in conjunction with its review of its internal operating system and software applications for transition to the Productivity Through Technology project. To maintain our competitiveness, the Company maintains the confidentiality of this data. Since the information in these schedules derives independent economic value from not being generally known to the public and which the Company has taken reasonable precautions to maintain confidential it is therefore trade secret pursuant to Minn. Stat (1) (b) and Minn. Rule , subp 3. Xcel Energy designated Schedules 13 and 14 as Trade Secret in their entirety because these schedules contain information about the contractually negotiated amounts that Xcel Energy pays to certain vendors for their services. To maintain our competitiveness in our contract negotiations with these vendors, the Company maintains the confidentiality of this data. Since the information in these schedules derives independent economic value from not being generally known to the public and which the Company has taken reasonable precautions to maintain confidential it is therefore trade secret pursuant to Minn. Stat (1) (b) and Minn. Rule , subp 3.

30 orthern States Power Company Docket o. E002/GR Attachment A Page 2 of 8 O-PUBLIC ITEMS IDEX Item / Location Justification Projected Costs, (continued) Vendor Proprietary Information, and/or Contractually egotiated Details O Connor Testimony, Various Schedules 9, 10 Outage Costs and Timeframes Heuer Schedule 13 Capacity Cost Study Outage cost and scheduling information includes information the Company considers to be trade secret data as defined by Minn. Stat (1)(b). This data includes confidential contract terms and budget detail. This information has independent economic value from not being generally known to, and not being readily ascertainable by, other parties who could obtain economic value from its disclosure or use. The disclosure of this information could adversely impact contract negotiations, potentially increasing costs for these services for our customers. Thus, the Company maintains this information as a trade secret. The Company seeks to treat the cost it pays for capacity as trade secret pursuant to Minn. Stat (1)(b). The Company acquires capacity at market-determined rates, this information has important economic value to the Company as a result of this information not being public, and the Company takes efforts to prevent their public disclosure. Wholesale Customer Information Heuer Schedule 12 Wholesale Customer Study The wholesale customer study contains information the Company considers to be trade secret pursuant to Minn. Stat (1)(b). More specifically, the trade secret information is a listing of the specific wholesale customers who contract for services with the Company and the specific services each customer takes. This information qualifies as trade secret information both because it is customer-specific information and because these are competitive services. Therefore, this information has important economic value to the Company as a result of this information not being public, and the Company takes efforts to prevent their public disclosure.

31 orthern States Power Company Docket o. E002/GR Attachment A Page 3 of 8 O-PUBLIC ITEMS IDEX Company Information Heuer Prefiled Discovery Information Request o. OAG-167 HomeSmart Revenues Marks Schedules 6, 7 and 10 Sales Forecast Data Lowenthal Schedules 3 and 4 Compensation and Benefits Studies Attachment A to Prefiled Information Request o. OAG-167 provides a summary of actual HomeSmart revenues and cross-charges for 2014 and contains information the Company considers as trade secret data as defined by Minn. Stat (1)(b). This information has independent economic value from not being generally known to, and not being readily ascertainable by, other parties who could obtain economic value from its disclosure or use. Thus Xcel Energy maintains this information as a trade secret pursuant to Minn. Rule Schedules 6, 7 and 10 include sales data the Company considers to be Trade Secret information protected by the Minnesota Data Practices Act. That information has economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons and is subject to efforts by the Company to protect the information from public disclosure. Xcel Energy maintains this information as a trade secret based on its economic value from not being generally known and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use. For this reason, we ask that the data be treated as nonpublic data pursuant to Minn. Stat , subd. 1(b). Schedules 3 and 4 are compensation and benefits studies, prepared by an external consultant, which the Company has designated as Trade Secret information in its entirety as defined by Minn. Stat , subd. 1(b). The information contained in these Schedules is not the work product of Xcel Energy, and we are only able to allow its release under the condition that it be protected as trade secret and not be publicly released. Because this information derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, Xcel Energy maintains this information as a trade secret pursuant to Minn. Rule , subp 3.

32 orthern States Power Company Docket o. E002/GR Attachment A Page 4 of 8 O-PUBLIC ITEMS IDEX Company Information (continued) Lowenthal Schedule 6 Appendix A, Prefiled Discovery Information Request o. OAG-36 Incentive Plan Details Lowenthal Schedule 6 Appendix A, Prefiled Discovery Information Request o. OAG-36 Incentive Plan Details Personal Information O Hara Schedule 9, Pages 2-3 Labor Costs for Lobbying Employees Schedule 6 and Appendix A Prefiled Discovery Information Request o. 36 contain incentive plan details used to create comprehensive benefits packages for employees, which the Company has designated as Trade Secret information as defined by Minn. Stat , subd. 1(b). Certain information contained in this Schedule and IR response has not been publicly released because it could put the Company at a disadvantage in the marketplace when competing for employees. Because it derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, Xcel Energy maintains this information as a trade secret pursuant to Minn. Rule , subp 3. Schedule 6 and Appendix A Prefiled Discovery Information Request o. 36 contain incentive plan details used to create comprehensive benefits packages for employees, which the Company has designated as Trade Secret information as defined by Minn. Stat , subd. 1(b). Certain information contained in this Schedule and IR response has not been publicly released because it could put the Company at a disadvantage in the marketplace when competing for employees. Because it derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, Xcel Energy maintains this information as a trade secret pursuant to Minn. Rule , subp 3. Schedule 9 contains information that qualifies as on-public Highly Confidential Trade Secret Data. The salary information of individuals is designated as Trade Secret information as defined by Minn. Stat , subd. 1(b), in that this information has not been publicly released. It also derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.

33 orthern States Power Company Docket o. E002/GR Attachment A Page 5 of 8 O-PUBLIC ITEMS IDEX Personal Information (continued) O Hara Appendix A Prefiled Discovery Information Request o. DOC-183 Lobbying Expenses Employee Expense Report Schedule 5 on Compact Disk Executive Compensation Attachments B and C to Prefiled DOC Information Request o. 183 contain information that qualifies as on-public Highly Confidential Trade Secret Data. The Company considers this data private data on individuals pursuant to Minn. Stat , subd. 12. The Employee Expense Statute, Minn. Stat. 216B.16, subd. 17, does not require that we identify detailed expense information for individuals below the Vice President level. Consistent with this past treatment of employee expense information, we have marked the individual names as on-public Highly Confidential Trade Secret data in these attachments. Additionally, in Schedule 5 of the Employee Expense Reports (EER), we have marked as Trade Secret the compensation information for the sixth through tenth highest paid officers contained in the Employee Expense Reports provided on compact disk. Pursuant to Minn. Stat. 216 B.16. subd. 17 (c), we must demonstrate the competitive disadvantage to us resulting from the release of this information outweighs the public information and access to the data. This compensation information is highly sensitive for several reasons. First, these employees are valued members of our management team and if compensation were published it would provide our competitors with valuable information, otherwise not available, allowing them to hire away these key employees. Second, we believe we have a duty to our employees to protect their private information; by making their compensation public anyone performing an internet search would have access to this very private information. Lastly, access to this information has not been restricted in any way to our regulatory agencies who work to represent the public interest.

34 orthern States Power Company Docket o. E002/GR Attachment A Page 6 of 8 O-PUBLIC ITEMS IDEX Cost Responsibilities for Rate Discounts Peppin Testimony, Page 7 Schedules 3, 4, 5, 6, 7, 8 Appendix A Prefiled Discovery Information Request o. DOC-731, Attachment A Volume 3 Required Information Tab II.6.A. 2016, 2017, 2018 Class Cost of Service Study Detailed Results Work Product Live Models and Workpapers CCOSS Model (CD) Revenue Model (CD) E8760 Allocator Data (CD) Volume 4A Workpapers Base Data Volume 4B Workpapers Adjustments Please note that certain portions of the enclosed testimony, schedules, prefiled discovery and workpapers contain nonpublic trade secret information pursuant to Minnesota Statutes section Relevant pages containing non-public trade secret information are marked as such in accordance with Minnesota Rule The non-public trade secret information includes highly sensitive financial information, including, but not limited to models, reports, expenses, sales and pricing data, that Xcel Energy maintains as confidential information. If publicly released, this information would have economic value to Xcel Energy s competitors and suppliers, to the detriment of Xcel Energy and its customers. Therefore, Xcel Energy requests that such non-public trade secret information not be disclosed to any other party without prior notification to and the written consent of Xcel Energy. The CCOSS and Revenue Models represent Company work product. Xcel Energy maintains this information as a trade secret pursuant to Minn. Stat (1)(b) based on its economic value from not being generally known and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use. Parts of the workpapers contain not-public data on individuals, which is also protected under the Minnesota Data Practices Act. Specific customer data (including the name, address or related usage) in the workpapers consist of private data on individuals and confidential customer data as recognized under the Minnesota Data Practices Act. As such, any unique information that can identify an individual customer is maintained by Xcel Energy as notpublic data and protected from public disclosure.

35 orthern States Power Company Docket o. E002/GR Attachment A Page 7 of 8 O-PUBLIC ITEMS IDEX Work Product (continued) Volume 4B Workpapers Adjustments Tab A34, Page 1 of 1 Estimate of Transco Costs The Transco workpaper contains information marked as Trade Secret Data pursuant to Minn. Stat (1)(b) and considered commercially sensitive by the Company, Xcel Energy Transmission Development Company, LLC (XETD) and Xcel Energy Southwest Transmission Company, LLC (XEST). The information summarizes costs incurred by Xcel Energy to support the Transco initiative. This information is not available outside of Xcel Energy except to consultants and attorneys subject to non-disclosure obligations. The trade secret information derives economic value, actual or potential, from not being generally known or being readily ascertainable. Competing transmission companies may be able to use knowledge of the costs incurred to (or expected to be incurred) by the Xcel Energy Transcos to gain an advantage in future Regional Transmission Organization competitive solicitation processes. Disclosure could thus directly harm Xcel Energy, XETD and XEST. Thus Xcel Energy maintains this information as a trade secret pursuant to Minn. Rule

36 orthern States Power Company Docket o. E002/GR Attachment A Page 8 of 8 O-PUBLIC ITEMS IDEX Insurance Related Information Miller Testimony, Various Schedules 2,3,4,5,6,7,8,9,10,11,12,13, 14 Coverage Amounts and Terms Replacement Values Xcel Energy has included information as part of the Direct Testimony and Schedules of Company witness Robert L. Miller which derives independent economic value from not being generally known to the public and which the Company has taken reasonable precautions to maintain confidential and is therefore trade secret pursuant to Minn. Stat (1) (b). Such information includes our insurers, the risk they insure, the premiums we pay, and how we structure our insurance coverage. Xcel Energy procures insurance in competitive insurance markets around the globe. To maintain our competitiveness in these markets, we must maintain the confidentiality of certain information. Information with respect to our insurance premium amounts and what we pay for each unique layer of risk we insure is proprietary to both the Company and our insurers and if it was made publicly available would provide a competitive advantage to other participants in the markets by creating a known benchmark in the market. When such information is made available by insurance brokers or other market participants, it is made anonymous so that particular risk profiles of particular companies cannot be benchmarked against premium tables. Further, while the components of an overall insurance program (i.e. who our participating underwriters are) need not be confidential, who a particular underwriter is for a particular layer of risk can provide competitive advantages to third parties since identifying the risks particular underwriters are willing to take would take is generally kept confidential in the various insurance markets where we procure insurance. Similarly, our insurance structure and the amount of coverage in each layer can also provide competitive advantage to other participants in various insurance markets. Consequently, we have marked this information in several of the following Schedules as Trade Secret.

37 STATE OF MIESOTA BEFORE THE MIESOTA PUBLIC UTILITIES COMMISSIO Beverly Jones Heydinger ancy Lange Dan Lipschultz John Tuma Betsy Wergin Chair Commissioner Commissioner Commissioner Commissioner I THE MATTER OF THE APPLICATIO OF ORTHER STATES POWER COMPAY FOR AUTHORITY TO ICREASE RATES FOR ELECTRIC SERVICE I THE STATE OF MIESOTA DOCKET O. E002/GR SUMMARY OF FILIG SUMMARY OF FILIG On ovember 2, 2015, orthern States Power Company, doing business as Xcel Energy, filed with the Minnesota Public Utilities Commission an application to increase retail electric rates through a three-year multi-year rate plan, in the State of Minnesota (the Application) by $194.6 million, or about 6.4 percent effective January 1, 2016 (60) days after filing, without suspension; an incremental $52.1 million, or about 1.7 percent effective January 1, 2017, without suspension, and an incremental $50.4 million, or about 1.7 percent effective January1, 2018, without suspension based on 2016 present revenues. The total increase for the three year proposal is $297.1 million, or about 9.8 percent. The Company requests a three year multi-year rate plan (MYRP), and offers an option for a five year MYRP, implemented pursuant to Minn. Stat. 216B.16, subds. 1 and 19. In addition, we are proposing some changes to the terms and conditions of our Electric Rate Book, Volume 2F, under which we provide service to our customers. If the Commission elects to suspend the proposed rate increase under Minn. Stat. 216B.16, subd. 2, the Company requests, pursuant to Minn. Stat. 216B.16, subds. 3 and 19, that an interim rate increase of $ million, or an approximate 5.5 percent overall bill increase, be effective on January 1,